Friday, June 4, 2010

"Investment bank activity in carbon trading" (BAC; C; GS)

From Reuters:

Investment banks are chasing opportunities in a $144 billion carbon market as the U.S. Senate considers a federal climate bill that would launch a cap and trade scheme. Governments worldwide are also expected to lean heavily on the private sector and carbon markets in particular as a way to raise finance to fight climate change. Investment banks have three main strategies in the carbon market: buying and selling emissions rights on behalf of corporate clients to profit from bid-offer spreads; proprietary trading with their own money; and investment in carbon offset development under the Kyoto Protocol's clean development mechanism (CDM). In the last category, Barclays PLC (BARC.L) said on Wednesday it had agreed a 98 million pound ($142.4 million) cash offer for Swedish carbon developer Tricorona (TRIC.ST), becoming the latest major bank to invest in the growing sector. [ID:nLDE651093] Following is a list of some of the more active banks, and what they do -- Bank of America Merrill Lynch (BAC.N) * forest protection carbon project origination (REDD) * structuring and investment in voluntary carbon markets * green principal investment and private equity * investor in Danish offsetter Core Carbon Group Barclays Capital (BARC.L) * market maker for clients and through prop desk * says has traded 2 billion tonnes of carbon allowances * has no proprietary investment in carbon commodities * research and structuring teams * agreed 98 million pound cash offer for Tricorona